Retail Credit Risk and Credit Scoring

Overview:

Introduction:

This training program provides comprehensive instruction on assessing and managing credit risks associated with retail lending activities. Through this training, individuals develop the skills necessary to make informed credit decisions, mitigate risks, and optimize the performance of retail credit portfolios.

Program Objectives:

At the end of this program, participants will be able to:

• Analyze and assess various types of credit risks associated with retail lending, including borrower default, delinquency, and fraud.

• Implement effective credit scoring models and methodologies to evaluate the creditworthiness of retail borrowers accurately.

• Interpret credit data and utilize appropriate tools and techniques to make informed credit decisions while minimizing risk exposure.

• Develop strategies for managing retail credit portfolios, including monitoring, tracking performance, and implementing risk mitigation measures.

• Apply regulatory guidelines and industry best practices in retail credit risk management to ensure compliance and enhance overall lending profitability and sustainability.

Targeted Audience:

• Analysts and policymakers who are new to credit and aren't necessarily daily involved in rating.

• Credit managers with experience who need a strategic perspective of lending and credit risk management methods.

• Regulators and auditors.

Program Outline:

Unit 1:

What is Risk?

• Risk definition.

• Examining dangers.

• Investigating banking risk, and then lending to consumers.

• The discussion of various hazards will include examples from both banking and non-banking firms.

• The Credit Cycle and Principles of Credit Risk Management.

Unit 2:

Credit Data:

• Data and the several sorts of data used to determine credit worthiness.

• Data sources.

• The importance of data integrity and accuracy in credit decision-making.

• Techniques for data analysis and interpretation.

• Data privacy and regulatory compliance considerations.

Unit 3:

Scorecard monitoring and tracking:

• Confirming that the scorecard remains appropriate for the intended audience.

• Determining whether the scorecard is still functional.

• Overrides and how they are handled.

• Account Acquisition.

• Account Management.

Unit 4:

Detection, prevention and analysis:

• Regulation.

• Bad Debt Provisions.

• Management Information.

• Techniques for detecting early signs of credit risk.

• Strategies for preventing credit losses through effective risk management practices.

Unit 5:

Designing and Recruiting a Credit Risk Management Team:

• Functions and roles within a credit risk management team.

• Retention and recruitment strategies for building a skilled and cohesive team.

• Training and professional development opportunities for team members.

• Creating a culture of risk awareness and accountability.

• Leveraging technology and data analytics in credit risk management.